TAGUIG CITY, 26 June 2025 – Increasing the share of renewable energy (RE) in the Philippines’ power generation mix marks a strategic shift away from costly and volatile fossil fuels, and in turn, will lower electricity prices in the long run, the Department of Energy (DOE) emphasized in a briefing yesterday.
DOE Undersecretary Rowena Cristina Guevara, in a media kapihan session organized by Clean, Affordable, and Secure Energy (CASE) for Southeast Asia Philippines, said: “We’re focused on ensuring that the transition delivers on its promise of affordability, reliability, and energy security. Renewables have no fuel costs. That means less exposure to price shocks from global oil and gas markets. With every solar or wind project we bring online, we reduce our dependence on imported fossil fuels, making our energy system more resilient.”
There is unprecedented momentum for RE investments, said Guevara, as the DOE awarded 1,392 renewable energy service contracts in April 2025, amounting to a potential capacity of 152 gigawatts (GW). “Mechanisms such as the Green Energy Auction (GEA) Program ensure that we procure RE at competitive prices—lowering electricity rates, encouraging new players, and ensuring a more level playing field,” she said.
Assuming that all GEA projects go online and the priority dispatch of renewables, Guevara shared simulations from the Independent Electricity Market Operator of the Philippines (IEMOP) on the potential impact of increased renewables on spot market prices by 2050. These model-based projections indicate that a balanced supply and demand scenario can reduce the spot prices significantly:
In Luzon, from PHP4.95 per kilowatt hour (kWh) in 2026 to PHP0.28/kWh in 2050;
In Visayas, from PHP5.28 per kilowatt hour (kWh) in 2026 to PHP0.48/kWh in 2050; and
In Mindanao, from PHP4.06 per kilowatt hour (kWh) in 2026 to PHP0.36/kWh in 2050.
With renewable energy expected to comprise a large share of the generation mix by 2050, other grid resources such as storage, flexible capacity, and demand-side management are needed to reduce prices and support reliable system operation. This will also lessen the country’s exposure to automatic pass-through costs brought by reliance on fossil fuels, resulting in more predictable and affordable electricity pricing for Filipinos.
In 2024, BloombergNEF ranked the Philippines as the second most attractive emerging market for RE investments. This sends a signal that the Philippines, with its strong policy framework and technical knowledge, is ready to accept more investments to advance the energy transition, said Institute for Climate and Sustainable Cities (ICSC) Executive Director Angelo Kairos dela Cruz.
“Everyone is ready to make the jump, but wanting to jump can be hard, and you need a push. For businesses, derisking instruments and tempering interest rates are crucial, and the DOE is already making strides in laying these out,” dela Cruz said.
In addition, access to concessional finance can further be integrated to lessen the risks for local banks. “We also need to have the concept of bankability translated at various levels, such as the community and household level. Investments and bankability should not only focus on big players when we know that the just energy transition should cut across various levels,” dela Cruz said.
Linking policies with international research and development will also help reduce risk for renewable energy investments, said Frederic Tesfay, Team Lead for Energy Projects in GIZ Philippines.
“While the Philippines’ physical geography makes energy expansion difficult, the energy transition will provide an opportunity for new technologies and new knowledge to come in. It is important to build relationships with other countries and investors to provide a space where funds and knowledge can flow,” Tesfay added.
This media kapihan session was organized to foster space for open dialogue, thoughtful questions, and shared learning on the energy transition among the media, who plays a pivotal role in building public understanding and national consensus.
“The success of our energy transition depends not just on policy and technology, but also on people. On awareness, understanding, and public support. And you— our colleagues in the media are crucial to making that happen. When the public is informed, change is possible,” said Undersecretary Guevara.
ABOUT
Clean, Affordable, and Secure Energy for Southeast Asia (CASE) is a regional project implemented in the Philippines, Indonesia, Thailand, and Vietnam that aims to drive the Southeast Asian power sector towards decarbonization and increased climate mitigation ambition.
CASE in the Philippines is jointly implemented by GIZ Philippines, with the Institute for Climate and Sustainable Cities as the expert organization and the Philippines’ Department of Energy as the political partner.
CONTACT
Sanafe Marcelo, ICSC: media@icsc.ngo, +63968 886 3466
Ira Guerrero, ICSC: media@icsc.ngo, +63917 149 5649
PHOTOS
Photos can be accessed here.